- As delivery becomes cheaper because of autonomous vehicles, the need for personal shopping trips could get cut in half,KPMG estimates.
- To fill the gap, however, one million robots could take to the street to deliver everything from pizza to groceries.
- The consulting firm envisions local “islands” where the technology can start, with different options for each geographic area based on the market.
Self-driving cars might allow you to get out of driving across town to Costco, but it doesn’t mean fewer vehicles on the roads.
According to a new study from the consulting firm KPMG, if shopping trips in personal vehicles decline even by half, one million autonomous delivery robots will need to take to the streets to fill the gap. For context, the firm estimates there are 300,000 taxis currently on US streets, and about 1 million buses.
“The number of bots needed to service such deliveries will be impressively large,” the consultancy team lead by Gary Silberg, the firm’s national automotive reader, writes in its report.
“There may well be vehicles that pool such orders, but to meet that level of urgency, they will not carry many packages to many customers. All such vehicles must travel from the store or delivery center to the consumer and return, and they will likely not move fast since they will need to unload at homes, perhaps navigating footpath. As a result, only a significant number of these vehicles can meet the totality of customer demand for the same-hour delivery market.”
KPMG expects a majority of vehicles to be used for “instant” delivery, assumably within the next hour, with the second largest demand for same day delivery, and a measly fraction for next day delivery.
However, it’s safe to assume companies may try to incentivise customers to choose slower or more flexible shipping options. Amazon, for example, already does this to some extent by offering Prime Now credit to members if they choose a slower shipping option instead of the company’s complimentary two-day shipping.
A one-size fits all approach won’t work when it comes to autonomous deliveries, KPMG says. Instead, the firm envisions delivery “islands” stationed at strategic locations to service towns or cities. These are places where the population is dense enough to support the expensive digital infrastructure required for autonomous deliveries.
This means local markets will be the source of competition, and could theoretically allow different companies to dominate in regional markets, as opposed to one leader across the country.
“From the analysis of individual islands you [companies] will be able to make the informed decisions about which markets to enter or which to continue competing in: how you will meet your own future,” Silberg writes.
“The revolution is coming. It’s time to prepare.”